Field of the Invention
The present invention generally relates to the purchase of digital media. More specifically, the present invention relates to rewarding a classification of purchasers of digital media.
Description of the Related Art
Digital media encompasses a range of audio, video, video games, and other software applications. Digital media is typically sold or transferred via download over a communications network or on some form of digital storage media including optical discs such as a compact disc (CD) or digital versatile disc (DVD) as well as non volatile memory such as flash memory. Initial purchasers of digital media either through a download or on a storage medium are those individuals who buy the digital media new, unused, and directly from the publisher, manufacturer, or authorized retailer. Secondary purchasers of digital media are individuals who obtain (either permanently or temporarily by purchasing, borrowing, or renting) previously used or previously sold digital media from an initial purchaser, an intermediate secondary purchaser, or a reseller (e.g., GameStop), lender (e.g., a public library), or lessor of the media (e.g., GameFly). Rather than buy a new copy of a video game or other digital content on a corresponding digital storage medium (e.g., a DVD), a secondary purchaser buys, borrows, or rents a copy that has been previously owned and/or used. Because the digital media has been previously owned or has been used by any number of secondary purchasers when borrowed or rented, the price of an item of digital media on the secondary market is generally lower than those prices paid by initial purchasers.
Secondary purchasers—and parties that facilitate secondary purchases—also cause a significant financial loss to the publisher, manufacturer, and/or authorized retailer of initial copies of digital media. For example, a particular video game might cost $50 when purchased new. In a marketplace devoid of secondary purchasers or entities facilitating borrowing or renting of digital media, 100 individuals who might want to play this particular game would each buy a copy of the video game. Each of those individuals would become an initial purchaser of the digital media by purchasing a copy for $50. A single entity (or collection of entities) selling the digital media would, in turn, enjoy $5000 in sales.
In a marketplace with intermediate entities providing rentals of digital media, that intermediate entity might buy five copies of the particular videogame from an otherwise authorized seller of the digital media. Over time, the facilitating, intermediate entity might rent those five copies to all one hundred interested individuals at a cost of $10 for a month of playing time. While all 100 individuals may not be able to play the particular video game at the same time, each individual would ultimately engage in game play and at a significantly lesser cost—$10 for a month-long rental versus $50 for a single, long-term purchase. The entity that initially sold the digital media to the entity facilitating the secondary purchases or rentals would only enjoy sales of $250 (five copies at $50 apiece). The intermediate entity, however, would enjoy rental revenues of $1000 (100 rentals at $10 apiece), which would more than offset the initial purchase price of $250.
Potential buyers may be motivated to become an initial purchaser in order to obtain the digital media as soon as it becomes available, for the status of being an actual owner of the digital media, or because a secondary market may not be readily available or exist for a particular piece of digital media. Secondary purchasers, in contrast, are motivated by the lower purchase or rental prices offered by secondary markets. Secondary users may also only desire to have the digital media for a short period of time until they view a movie once or twice or ‘beat’ a particular game. Secondary purchasers may not desire to acquire a catalog of content or to re-watch or replay a particular movie or game over time. These considerations and the effects of the same-especially in light of the disparity in revenues to the publisher versus the intermediate reseller as noted above—become even more pronounced as the costs of producing content and digital media increase.
For example, the development cycle of a video game is extremely long, complex, and involves collaboration and investment from multiple individuals and businesses. The price of such a video game corresponds to the length and complexity of such a process as each entity in the development life cycle needs to receive appropriate remuneration for their time and effort. If parties are not properly compensated, then those parties will no longer participate in the development of video games or other forms of digital media. If certain entities discontinue their involvement in content development, then the availability of new content decreases as does the quality of the content that continues to be produced in order to minimize costs. A healthy initial purchaser population is therefore essential to recouping these investments of time and resources.
Notwithstanding the importance of an initial purchaser market, secondary markets are an important part of the distribution and development lifecycle. For example, secondary markets may be useful to publishers and authors because secondary markets may allow for promotion a particular title or series through word-of-mouth publicity or viral marketing. These grass-root efforts allow for sampling of lesser-known titles and publishers and build a future dedication to and interest in the same. In addition, secondary markets also allow for physical media to be recycled for use by multiple owners who might not otherwise make the investment in a particular game platform if there is a lack of available content at a moderate price.
Publishers, manufacturers, retailers, developers, performers, authors, and all other persons involved in the content development and distribution lifecycle, therefore, need to encourage potential buyers to become initial purchasers while preserving the benefits of the secondary market. These entities further need to encourage secondary purchasers to become initial purchasers for future—if not immediately available—digital media. There is a need for improved systems and methods for rewarding classifications of purchasers of digital media.